Vending machine built to dispense marijuana

After a year and a half of collecting data at a Santa Ana dispensary, an Aliso Viejo company that produces vending machines for medical marijuana plans to roll into other states.

The Dispense Labs vending machine looks like an unassuming green box, but it's all about what's inside. Open the high-security steel door, and you'll see a sea of wiring among flashing lights and hundreds of tiny compartments that store marijuana in various quantities.

The machine is designed to scan a user's fingerprint and identification card. It then allows the user to choose a product and pay with cash or a credit card, said Joe DeRobbio, Dispense Labs' founder and chief executive.

Endexx Corp., a publicly traded Arizona company with a medical marijuana division called m3Hub, recently announced a plan to purchase Dispense Labs; DeRobbio said he expects the purchase to be completed this week. The goal is to create a cluster of medical marijuana companies that can streamline the industry from “seed to sale,” Endexx CEO Todd Davis said.

Davis said Autospense, the vending machine, is unique in the market.

“That machine is by far more sophisticated and safe and compliant than any other system that's out there,” Davis said. “The Autospense machine works the best.”

Tech solution

When DeRobbio was thinking about how to address problems in the medical marijuana industry, he realized humans cause a lot of them. “The human factor is the biggest factor in your theft cycle,” he said.

So he focused on the idea of a vending machine. His friend Steve Pixley – president and CEO of AutoCrib, a Santa Ana company that makes industrial vending machines – had taken the idea of food vending and applied it to industrial tools to save money.

The machine has been in development for about three years, and DeRobbio said he has orders pending in California, Colorado, Washington and Arizona.

DeRobbio and Pixley don't like to call the Autospense a vending machine.

“They're much more sophisticated – $5 million in software development, 1.5 million lines of code. There is no vending machine on the market that comes anywhere near to what these machines can do,” Pixley said. “It was basically an adapted industrial machine, where now it's a purpose-built medication device.”

They want to bring the medical marijuana industry to its next phase, DeRobbio said. He and Davis predict the federal government will reclassify medical marijuana as a Class II narcotic, which means the government will want to track every aspect of production. “Unqualified people are currently selling medical marijuana to patients, and this will help reopen a new level of pharmaceutical-grade compliance to an industry that desperately needs it,” DeRobbio said.

Test case

A machine has been tested at a Santa Ana dispensary. The company added extra security measures, including steel fixtures and locking moving parts, after customers tried to break in. DeRobbio was able to collect data, including usage trends, from the machine. The machines are available only for rent so they can be updated as the software improves.

After Dispense Labs announced Autospense last year, Medbox Inc., a medical marijuana vending machine company based in West Hollywood, filed a lawsuit alleging patent infringement.

“We felt they were marketing technology that was identical to ours,” said Vincent Mehdizadeh, Medbox's chief operations officer and board chairman. “After a year of litigation statements received by Dispense Labs as to their inability to sell any of their machines, we dismissed the lawsuit in order to save our shareholders unneeded expense in maintaining litigation against the company. We did reserve the right to bring suit again if we feel it is necessary to do so.”

DeRobbio rejected the claim that Dispense Labs stole Medbox's design, and said the suit was dropped because Medbox couldn't substantiate its claims with evidence. Dispense Labs has waged a counterclaim and expects to go to trial February.

“We have no concerns about Medbox filing another suit,” DeRobbio said.

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